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Global Ag View: Argentina to increase its global presence

Agriculture in Argentina has a positive outlook, despite current turmoil.

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Global Ag View: Argentina to increase global presence

Despite current economic turmoil and unprecedented currency volatility, Argentina will remain a major player in the global agricultural marketplace going forward.

 

According to Dutch multinational Rabobank, the current turmoil should serve as a reminder Argentina remained an economy in transition.

 

While inflation was expected to remain high in the short term, a revised agreement with the International Monetary Fund and other measures were aiming to bolster confidence and stabilise the economy.

 

Competitive

 

Argentine farmers have been the most competitive in the global market.


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Despite recent changes in export taxes policy, Rabobank expected Argentina to continue to be very efficient and expected further expansion in soybean acreage though the next decade.

 

The crushing sector was also expected to maintain its relevance to global trade, with its good location to producing areas and the ports a competitive advantage in the world markets.

 

Rabobank analyst Victor Ikeda said: “For corn, while acreage may be flat, with an important role in the crop rotation system, yield gains are expected to push local production in the coming years, which should be absorbed by increasing demand from the animal protein industry.”

 

Livestock

 

With growing production and almost flat domestic demand, Argentina was expected to gradually boost its presence on the international beef market, with exports expected to reach about 800,000 tonnes by 2027.

 

“For the poultry and pork sectors, the scenario was still challenging,” Mr Ikeda said.

 

“However, it is important to mention that, structurally, Argentina has an important advantage as a leading producer of feedstuff which, in turn, is likely translate into opportunities for the sector in the long term.”

 

However, there were still risk factors from the political situation. If the fiscal adjustments made did not create enough market confidence to stabilise the economy, devaluation of currency could continue, impacting inflation.

 

There were also threats to exports if a new government next year returned to populist decisions.

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